Canadian governments need to adjust energy policy to ensure there is an outcome, not endless debate

How did energy projects in Canada become so controversial? Public protests over pipelines and hydraulic fracturing have become commonplace, and the National Energy Board (NEB) has had record numbers of intervenors in pipeline hearings.

One might be tempted to lay the blame at Stephen Harper for calling pipelines “no-brainers” and giving the impression that pipelines such as Northern Gateway would be approved no matter what. But the controversy and debate around energy projects spans much more than pipelines. One only has to look at the discussion of hydraulic fracturing in Eastern and Atlantic Canada to realize that fossil fuel development is not generally accepted.

Opposition is not limited to fossil fuels; renewables such as wind are equally contentious, with protests in Ontario and Quebec. And let’s not forget the controversy over the Site C hydro dam in B.C. – protest groups have given an ultimatum that the government must choose between LNG exports and Site C.

Politicians of all stripes across the country have latched onto the idea of “social licence” – an amorphous concept that suggests energy projects need not only regulatory approval but also approval from society.

Rachel Notley used the idea of social licence to link getting pipelines built with Alberta’s Climate Leadership Plan. In Nova Scotia, the government named having a social licence in place as one of the conditions for lifting the moratorium hydraulic fracturing. Justin Trudeau stated social licence was necessary for Energy East to proceed. Tom Mulcair claimed pipeline projects “will not obtain the social licence they require without having a rigorous review process in place to ensure environmental sustainability, community partnership and long-term prosperity of our economic development.”

This issue has become such a prominent part of the discussion around energy projects that Prime Minister Trudeau has initiated a review of federal energy and environmental regulation, citing the need to restore trust and confidence in both. As well, the Energy and Mines Ministers’ Conference – the annual gathering of federal, provincial and territorial ministers responsible for energy and mining portfolios – convened a working group on public confidence in advance of their August 2016 meeting in Winnipeg.

There is even a report with different case studies on “building public confidence” in mining and energy projects, which aims to describe the role of government in public confidence.

What do the concepts of “social licence” and “public confidence” mean for energy projects and their regulators in Canada? This is the question I explore with my co-authors – an interdisciplinary collaboration of academics from across Canada – in a white paper published by the University of Calgary’s School of Public Policy in May 2016.

We explore the origins of the term “social licence” and related concepts, and offer three perspectives on the state of energy regulation in Canada – broken, not broken, and can be improved. These lead to eight recommendations for improving energy policy and regulation in Canada. Here, I focus on three of the recommendations that, in my opinion, are the most helpful for improving energy policy and regulation in Canada.

As part of white paper, we provide a comprehensive literature review of the origins of “social licence”: the idea has its roots in the mining sector and corporate environmental performance more broadly. The concept of social acceptance, on the other hand, originated in the development of renewable energy technologies. Both terms have a common element: the idea of legitimacy, that the actions of an entity are viewed as appropriate or desirable, and have support from stakeholder, the general public, opinion leaders and government officials.

Comparing these concepts to the current debate about energy use and energy sources in Canada, we argue that the idea of social licence is no longer a useful concept, having broadened in scope so much that its meaning has become “unclear, amorphous and confusing.” Moreover, we recommend that whenever regulators, policy-makers or politicians use terms such as “social licence,” “acceptance,” “support” or “public confidence” they do so carefully, with a clear explanation of their interpretation of the term.

Relatedly, we discuss the extent to which the public can and should be involved in energy discussions and regulatory hearings. We note that regulators are often placed in a difficult position of determining who can have standing in the hearing of an energy project, given the regulator’s mandate and the scope of the project. Developing clear standards for identifying hearing participants that are consistent across jurisdictions will help build legitimacy in regulatory processes. The Canadian Energy Strategy is a natural place to implement this policy change.

A key issue in the legitimacy of regulatory processes, and in the current energy debate in Canada, is the scope of regulatory hearings. For practical and statutory reasons, the scope of topics for determining whether a project is in the public interest is limited; this creates frustration for Canadians with concerns outside of a regulator’s or hearing’s mandate.

This is a clear policy gap, as there is limited scope for Canadians to engage with policy-makers beyond regulatory hearings. We recommend energy regulators should report recurring concerns beyond their mandate to policy-makers, as this information can and should be used to help Canadians’ speak back to policy makers.

At the end of the day, Canadians appear to be caught up in a great energy debate – about where our energy comes from, how we use it, and what the future of energy use will be in Canada. It behooves our provincial and federal governments to adjust energy policy and regulation to ensure there is an outcome, rather than endless debate. While the Trudeau government’s modernization plan for the NEB is a start, it should not be considered a silver bullet, as our current debate is much deeper and more complex than the regulation of interprovincial pipelines. The white paper provides recommendations for improving trust in and legitimacy of energy regulation in Canada, which is something all levels of government should strive for.